Dead Men Pay No Taxes

J.D. Foster /

As the Congress prepares to address the death tax in the waning weeks of December, one argument undergirds the primary defense the tax. The argument is the tax is needed for “fairness”, to impose an adequate level of taxation on the rich. Of all the arguments in tax policy, this may be the least legitimate, because just as “dead men tell no tales”, dead men pay no taxes.

There is a good reason it is called an “estate tax”, rather than a dead rich man’s tax. An estate is a business construct and can pay tax. It is a summary testament to the individual’s life’s work in the economic realm. The tax levied on the estate cannot then touch the deceased, who has naught left but to rejoice in freedom from the IRS.

If not the deceased, who pays the tax? The recipients of the estate. Are they rich? Who knows? Some may be before their inheritance. More may be after their inheritance. But the tax is not levied on some or most, but on all by collecting the tax at the estate level. (more…)